HCS HB 1702 -- TAX CREDITS FOR EDUCATION-RELATED CHARITABLE
DONATIONS

SPONSOR:  Cooper, 120 (Thompson)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Tax Policy
by a vote of 10 to 7.

This substitute authorizes an individual income tax credit for
tax years beginning on after January 1, 2005, for contributions
of $200 or more made to a Missouri nonprofit educational
assistance organization.  Contributions for the educational
expenses of a taxpayer's dependent do not qualify.  The amount of
the tax credit will be equal to 50% of the contribution.

The amount of the tax credit cannot exceed the tax liability of
the taxpayer in any one year.  Any unused credit can be carried
forward for four years.  The cumulative amount of tax credits
cannot exceed $10 million per fiscal year.  The Director of the
Department of Economic Development will establish a procedure to
apportion the tax credits among all nonprofit educational
assistance organizations and annually determine which
organizations qualify based on the specified conditions.

The substitute allows the director to contract with a nonprofit
educational assistance organization to be a designated oversight
organization to administer the program.  Contributions are to be
distributed for student scholarships less up to 2% for
administrative costs.

School boards of certain school districts may opt to participate
in this program by adopting a resolution and submitting it to the
Department of Elementary and Secondary Education.

The substitute requires the eligible pupil count to be adjusted
if a pupil no longer is enrolled or transfers to another school
because of an educational scholarship.

FISCAL NOTE:  Estimated Effect on General Revenue Fund of a cost
of $130,950 in FY 2005, a cost of $10,000,000 to an income of
$8,946,800 in FY 2006, and a cost of $10,000,000 to an income of
$8,946,800 in FY 2007.  No impact on Other State Funds in FY
2005, FY 2006, and FY 2007.

PROPONENTS:  Supporters say that the bill provides an educational
opportunity for students in low-achieving school districts.
Contributions made to the fund will provide scholarships for up
to 3,000 students each year.  Money to a school district leaves
when a student leaves, providing the school district with
incentive to improve.  It gives parents of children in a
provisionally accredited school district a choice for their
children's education.

Testifying for the bill were Representatives Cunningham (86), El
Amin, and Hoskins; Leslie Farr, II; Cochran Garden Tenant
Management; Carver Christian Academy; Ptah Academy; Shirley
McFarland; Annie Cooper; and Choice for Every Child.

OPPONENTS:  Those who oppose the bill say that they oppose tax
credit vouchers.

Testifying against the bill were Missouri National Education
Association; and Missouri AFL-CIO.

Karla Strobel, Legislative Analyst

Missouri House of Representatives
92nd General Assembly, 2nd Regular Session
Last Updated September 23, 2004 at 11:16 am